Motor fuel tax and carbon tax rates on fuels and substances
Last updated on December 16, 2024This page provides information on the motor fuel tax and carbon tax rates that apply to fuels and substances.
For information on motor fuel tax and carbon tax exemptions, see our Exemptions page.
On this page
- Clear gasoline and clear diesel
- Renewable fuels
- Other fuel types
- Alternative motor fuels
- Natural gas and biomethane
- Substances sold for use other than in an internal combustion engine
Clear gasoline and clear diesel
Motor fuel tax
Motor fuel tax on clear gasoline and clear diesel is made up of provincial and dedicated taxes. The provincial tax rate varies by region and the proceeds from this tax go to general revenue. The dedicated taxes apply in certain regions of B.C. and go to 3 organizations:
- B.C. Transportation Financing Authority (BCTFA)
- South Coast British Columbia Transportation Authority (TransLink – Vancouver Area)
- British Columbia Transit (BC Transit – Victoria Area)
B.C. Transportation Financing Authority (BCTFA)
The dedicated tax on clear gasoline and clear diesel purchased anywhere in B.C. is 6.75¢ per litre.
TransLink - Vancouver area
The dedicated tax on clear gasoline and clear diesel purchased inside the South Coast British Columbia transportation service region (SCTA) is 18.50¢ per litre.
The SCTA includes:
- North to and including Lion’s Bay
- West to and including Bowen Island
- South to the international border
- East to and including the municipalities of Langley, Maple Ridge and Pitt Meadows
See a map of the South Coast BC Transportation Service Region (PDF, 2.3MB)
BC Transit – Victoria area
The dedicated tax on clear gasoline and clear diesel purchased inside the Victoria regional transit service area (VRTA) is 5.50¢ per litre.
The VRTA includes all incorporated areas of the Capital Regional District and unincorporated areas of the Capital Regional District that are part of the Juan de Fuca Electoral Area, excluding the Malahat and Renfrew Land Districts. The islands within these areas, including Salt Spring Island and the Outer Gulf Islands, are not included in the VRTA.
See a map of the Victoria Regional Transit Service Area (PDF, 842KB)
When the Dedicated Taxes for SCTA and VRTA Apply
The dedicated taxes for SCTA and VRTA apply when clear gasoline or clear diesel is purchased inside those areas. A sale is considered to take place inside the SCTA or VRTA if title to the fuel, including the rights and responsibilities of ownership, transfers within those areas.
If fuel is purchased inside the SCTA or VRTA but used outside those areas, the dedicated tax for the SCTA or VRTA apply since ownership of the fuel transferred inside the SCTA or VRTA.
If fuel is purchased outside the SCTA or VRTA but used inside the SCTA or VRTA, the dedicated tax for SCTA or VRTA do not apply since ownership of the fuel transferred outside the SCTA or VRTA.
If you're a fuel seller, see Fuel Sellers (MFT-CT 001) (PDF, 240KB) for information on when you may be required to pay additional security or when you may be eligible for a refund or credit.
Carbon tax
In addition to the motor fuel tax on clear gasoline and clear diesel, carbon tax also applies. Under carbon tax, clear gasoline is classified as gasoline and clear diesel is light fuel oil.
The carbon tax rate for all fuel types is applied consistently throughout B.C., regardless of where it's purchased or how it's used.
Renewable fuels
Motor fuel tax and carbon tax apply to renewable fuels as follows:
- Ethanol at the same tax rates as clear gasoline
- Biodiesel, renewable diesel and straight vegetable oil (SVO) at the same tax rates as clear diesel (light fuel oil - diesel)
Blendstock
Motor fuel tax and carbon tax apply to blendstocks such as conventional blendstock for oxygenate blending (CBOB) and reformulated blendstock for oxygenate blending (RBOB) at the same rates as clear gasoline, unless an exemption applies.
Other fuel types
Motor fuel tax and carbon tax apply to other fuels that are purchased for use in an internal combustion engine.
Coloured gasoline and coloured diesel
Total tax rate on coloured gasoline is 20.61¢ per litre.
- 3.00¢ motor fuel tax
- 17.61¢ carbon tax (gasoline)
Total tax rate on coloured diesel is 23.74¢ per litre.
- 3.00¢ motor fuel tax
- 20.74¢ carbon tax (light fuel oil - diesel)
Coloured diesel and coloured gasoline have a lower motor fuel tax rate than clear diesel and clear gasoline. Coloured fuel may only be sold, purchased or used for authorized purposes. Sellers of these fuels must apply for and receive authorization from us. Purchasers are required to complete a coloured fuel certification prior to purchasing coloured fuel under certain conditions. For more information, see Coloured Fuels and Other Substances (MFT-CT 003) (PDF, 250KB).
Locomotive fuel
Total tax rate on locomotive fuel is 23.74¢ per litre.
- 3.00¢ motor fuel tax
- 20.74¢ carbon tax (light fuel oil - locomotive)
Under motor fuel tax, locomotive fuel is fuel for use in an internal combustion engine in any rolling stock or other vehicle when run on rails but does not include propane and natural gas. Under carbon tax, light fuel oil – locomotive is a light fuel oil suitable for generating power by means of a diesel engine.
Marine diesel
Total tax rate on marine diesel is 23.74¢ per litre.
- 3.00¢ motor fuel tax
- 20.74¢ carbon tax (light fuel oil -diesel)
Under motor fuel tax, marine diesel is diesel fuel that is used in a ship as fuel for an internal combustion engine including a marine gas turbine engine. Under carbon tax, light fuel oil – diesel is a substance that is suitable for generating power by means of a diesel engine.
Marine bunker fuel
Total tax rate on marine bunker fuel is 25.50¢ per litre.
- Exempt from motor fuel tax
- 25.50¢ carbon tax (heavy fuel oil)
Under motor fuel tax, marine bunker fuel is bunker oil that is used in a ship as fuel for an internal combustion engine but does not include marine diesel fuel.
Aviation fuel
Total tax rate on aviation fuel is 21.59¢ per litre.
- 2.00¢ motor fuel tax
- 19.59¢ carbon tax
Under motor fuel tax, aviation fuel is fuel specifically for use to propel an aircraft with a non-turbine engine. Under carbon tax, aviation fuel is a substance suitable for use to propel an aircraft with a non-turbine engine.
Jet fuel
Total tax rate on jet fuel is 22.65¢ per litre.
- 2.00¢ motor fuel tax
- 20.65¢ carbon tax
Under motor fuel tax, jet fuel is fuel that is specifically for use to propel an aircraft with a turbine engine. Under carbon tax, jet fuel is a substance suitable for use in an aircraft with a turbine engine.
Propane
Total tax rate on propane is 15.08¢ per litre.
- 2.70¢ motor fuel tax
- 12.38¢ carbon tax
For information on fuel exemptions, see our Exemptions page.
Alternative motor fuels
Alternative motor fuels are fuels used to propel motor vehicles that, when compared to gasoline and diesel-powered vehicles, produce less emissions. You do not pay motor fuel tax on the following fuels if certain conditions are met.
Hydrogen
Hydrogen is exempt from motor fuel tax when purchased for use in fuel-cell vehicles and internal combustion engine vehicles, except hydrogen that is produced by electrolysis using coal-generated electricity, unless carbon capture and storage or another process is used to contain the carbon dioxide emitted.
Carbon tax does not apply to hydrogen.
Methanol blends
Methanol blends are exempt from motor fuel tax when an alcohol-based blend of gasoline or diesel fuel contains at least 85% methanol.
Carbon tax rates are as follows:
- Methanol portion is 8.78¢ per litre
- Gasoline portion is 17.61¢ per litre
- Diesel portion at 20.74¢ per litre
Note: Methanol produced from biomass is not a fuel and is not subject to carbon tax.
Natural gas and biomethane
Natural gas
Carbon tax
Carbon tax applies to natural gas at the rate of 15.25¢ per cubic metre or $3.9859 per gigajoule.
Motor fuel tax
Motor fuel tax does not apply to natural gas if purchased for use in:
- An internal combustion engine of a motor vehicle
- In a locomotive
Motor fuel tax applies to natural gas if used in a stationary internal combustion engine such as, a compressor or generator. The motor fuel tax rate depends on the:
- Use of the stationary internal combustion engine
- Quality of the natural gas being compressed – marketable or non-marketable
- Location of the compressor, pump, generator or other type of stationary internal combustion engine
| Use | Quality of the product being moved, compressed or transmitted |
Location | Motor fuel tax rate |
|---|---|---|---|
| To move natural gas to market, or in or out of storage facilities | Marketable | Outside of the processing plant | 1.90¢ per 810.32 litres |
| To compress | Marketable | Within the processing plant | 1.10¢ per 810.32 litres |
| To compress | Non-marketable | Within the processing plant, at the wellhead, or along the pipeline between the wellhead and the processing plant | Exempt |
| To transmit | Waste gas (comprised primarily of hydrogen sulphide and carbon dioxide) | Within the processing plant, at the wellhead, or along the pipeline between the wellhead and the processing plant | Exempt |
| To inject (into a depleted well for permanent disposal) | Waste gas | Wellhead | Exempt |
| To pump oil (Oil includes all types or grades of petroleum products being moved between locations e.g., crude, diluted bitumen, gasoline) |
Any | Wellhead or within the processing plant | 1.10¢ per 810.32 litres |
| To pump oil | Any | Along the pipeline from the wellhead and the processing plant, from a processing plant to market, or in or out of storage facilities | 1.90¢ per 810.32 litres |
| For purposes other than described above | Any | Locations other than those described above | 1.10¢ per 810.32 litres |
Note: Generally, natural gas is:
- Marketable if it's dry (i.e. consists mainly of methane)
- Non-marketable if it's wet. However, wet natural gas is marketable if it's:
- Sold for direct consumption as a domestic, commercial or industrial fuel or as an industrial raw material (does not include processing wet gas), or
- Delivered to a storage facility
If you're unsure how tax applies to your specific circumstances, contact us.
Self-assess tax on natural gas use
Whether you imported, purchased, or extracted natural gas from the ground and used for a taxable purpose, you must self-assess the motor fuel tax and carbon tax if you did not pay tax at the time of purchase. For information on self-assessing, see Self-Assessing Motor Fuel and Carbon Tax (MFT-CT 006) (PDF, 190KB).
Biomethane
Biomethane is a carbon-neutral renewable fuel produced from biomass that is indistinguishable from natural gas and is not subject to carbon tax. For more information, see Natural Gas and Biomethane Sellers (CT-001) (PDF, 150KB).
Substances sold for use other than in an internal combustion engine
Heating oil, non-motor fuel oil, and other substances such as, gasoline or natural gas marketed or sold for use other than in an internal combustion engine are (e.g. a solvent) are not subject to motor fuel tax. Generally, these substances are subject to carbon tax, 7% PST and in some cases, the 0.4% ICE Fund tax under the Provincial Sales Tax Act.
For example, if diesel fuel is:
- Coloured and sold as heating oil, it's not subject to motor fuel tax but is subject to PST, unless a specific exemption applies (i.e. for residential use), and carbon tax. It's also subject to the ICE Fund tax.
- Sold as non-motor fuel oil (i.e. not diesel, motive fuel or coloured heating oil), it's subject to PST and carbon tax, unless a specific exemption applies. It's not subject to the ICE Fund tax.
For more information, see Energy, Energy Conservation and the Ice Fund Tax (PST 203) (PDF, 370KB), and Coloured Fuels and Other Substances (MFT-CT 003) (PDF, 250KB).
Find a list of all the carbon tax rates by fuel types including substances, solid fuels and combustibles on our Carbon tax rates by fuel type page.
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Contact information
Contact us with your questions about the motor fuel tax or carbon tax.
Our hours of operation are Monday through Friday, 8:30 am to 4:30 pm.
1-877-388-4440
1-250-410-0373